UBS Global Asset Management has listed a new ETF on the London Stock Exchange (LSE) offering investors access to commodities markets with the additional benefit of GBP currency hedging.
The UBS ETF (IE) CMCI Composite hedged GBP SF UCITS ETF is a swap-based ETF that enables investors access to broad commodities. The investment objective of the ETF is to deliver the performance of the UBS Bloomberg CMCI Composite Total Return GBP-hedged index by synthetically replicating the index performance through the use of futures contracts.
The UBS Bloomberg Constant Maturity Commodity Index is a 2nd-generation index which extends beyond use of short dated futures contracts and diversifies investment across the maturity curve. By providing investors with access to ‘Constant Maturities‘, it not only gives a more continuous exposure to the asset class and avoids the speculative activity that can surround monthly rolls of traditional indices it also helps to mitigate negative roll yield, making the index more representative of the underlying market price movements and more efficient as a result*. The Index is diversified across 26 commodities and five maturities.
Adverse currency movements can have a major impact on the performance of an investment thus potentially negating returns. The built-in currency hedging function in the ETF protects against such movements whilst also offering a compelling tactical opportunity for investors looking to benefit when commodities perform well.
Compared against the Bloomberg Commodities Index (BCOM), the CMCI has outperformed by 4.4% on an annualised excess return basis since inception in January 2007**. It has also delivered stronger returns than other indices such as the DBLCI, JPMCI, MLCX and CS CI with lower levels of volatility (17.2% p.a.)
This latest listing further broadens UBS’s currency-hedged ETF offering. UBS ETFs offers more than 50 currency hedged ETFs in Europe making it the largest provider of currency-hedged ETFs in Europe.
